Comments about ‘Robert J. Samuelson: Economics lacks the vocabulary to explains what is happening’

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Published: Tuesday, Dec. 3 2013 12:00 a.m. MST

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Patriot,
Herriman, UT

The author with his jaded view of our society fails to mention the real and ominous inflation rate that is becoming more apparent daily despite Washington trying to spin the rate differently.He also failed to mention the burgeoning national debt. Two factors that combined with an entitlement minded population, that largely thinks big government should cradle them to grave on the backs of the responsible, does not portend good times ahead for America.

george of the jungle
goshen, UT

Consequence, No one is responsible for their actions.

Nate
Pleasant Grove, UT

It's called HopeAndChange.

Tyler D
Meridian, ID

I think the most likely explanation is uncertainty of government tax and spending policies.

In the Rational Expectations school of economic thought, when government accumulates a large amount of debt, instead of treating this like a free lunch citizens will forego investing and hoard cash under the expectation that these funds will be needed (i.e., taxed) to pay down the debt.

If this is true then the sooner we return to the Clinton tax rates the better. And if we can ever find the political will to shore up our entitlements (which really means reducing healthcare costs) and reform the tax code, this Bush created debt can be paid off and investments will soar.

Semi-Strong
Louisville, KY

Tyler D,

The problem with Rational Expectation is we are being constantly schooled (at least recently) to expect the irrational . . .

pragmatistferlife
salt lake city, utah

I think this discussion is a very important discussion to have because without the proper language it's virtually impossible to discern and analyze reality. Just look at the first two comments on this thread, immediate imbedded ideological reactions to a call for something new.

I don't think there's any question that we are in new economic territory for anyone born after 1940. We have unprecedented inequality, unprecedented debt (both personal and public), unprecedented wealth creation along with unprecedented dependency on public safety net programs, unprecedented low population growth, unprecedented demographic changes, and I could go on for the full 200 words. The point is this isn't 1787, 1942, 1952, or 1982, this is a new reality a reality that demands a new economy and until we start to face this, as Samuelson suggests we're just wandering in the wilderness.

procuradorfiscal
Tooele, UT

Re: "We have unprecedented inequality . . . ."

Yeah, unprecedented in it's tiny, tiny amplitude.

For the first time in American history, real differences in lifestyle between the richest and poorest among us are so unremarkable, it would astound our ancestors.

Today, the only Americans in serious danger of starvation are those being abused and those suffering from anorexia. America's poor are as likely to have a decent place to live, indoor plumbing, hot and cold water, televisions, refrigerators, cars, and access to recreation as the wealthiest Americans.

Wealth redistribution occurs an a breathtaking scale in today's America. The most productive Americans are being penalized to subsidize the least productive to a degree unimagined even 20 years ago. Thankfully, there are more of them than ever before.

Unless the abortive launch of Obamacare results in a well-deserved reversal of its flawed, unsustainable, ultimately dangerous health policy, it'll only get much, much worse.

Yet, leftists' shrill, disingenuous bleating still centers about the "unfairness" of one person having one or another unimportant bauble that another doesn't.

Not because there's any actual inequality, but simply for political advantage.

That's just sad.

Mountanman
Hayden, ID

Median household income fell for the fifth straight year in 2012,(latest available figures) the Census Bureau reported, to $51,017. That was the lowest annual income, adjusted for inflation, since 1995. The government may not call this a recession, but it absolutely is not growth!

Patriot,
Herriman, UT

We dont need sophisticated "proper language" gentleman to turn this out of control government around. We need statesmen who will tell the people that this nation is virtually broke! We need conservatives to start trotting out the propaganda machine like the libs have done so well the past 50 years and let the people see where we are headed if we dont start taking some responsibility for our own actions.Let them know the history of other countries who have let their entitlements get away from them. For a closer look tell the people to even look at bankrupt cities like Chicago, LA and numerous other cities in America being run by liberals.You can call these comments idealogical or what ever makes you feel better but when we are both standing in a bread line someday because taxes and inflation have ravaged our economy, I think our ideologies will be the same.

JoeCapitalist2
Orem, UT

The "inequality" crowd wants to redistribute wealth on the basis of their perception of what is "fair".

They constantly try to paint a picture of modern day America as functionally equivalent to the climate of France during the revolution described in "A Tale of Two Cities". They want you to believe that wealthy people today are exactly like the French Aristocracy who drove around in gold plated carriages while vast numbers of "common folk" starved to death.

We don't have a caste system today. The poorest among us may very well be the richest in just a few years. Poor people today often enjoy a quality of life that was unimagined by wealthy people just a few centuries ago. Obesity, rather than starvation is the bigger health problem among the poor.

If I have everything I need, why should I care if somebody else has twice what I have (or 10 times, or even 10000 times). Envy and theft are not noble traits even when directed at all those "evil rich people".

pragmatistferlife
salt lake city, utah

procurodalfiscal, "For the first time in American history, real differences in lifestyle between the richest and poorest among us are so unremarkable, it would astound our ancestors."

That actually is true thanks to the new economy that was created after WWII and lasted until the mid 1980's. The problem is that economy of value production and CEOs making 20 times what the worker made is at best on it's last legs and more likely gone.

Now we have nearly 50 million people depending on food assistance programs not to starve (your anorexia statement is ridiculous), it takes nearly 2.5 people working in a household to maintain a sustainable living standard, and we have the largest employer in America holding charity food days for their own employees.

The entire economy has been twisted to favor a very few. When the top 1% have wealth gains of 200 to 300 percent and the bottom 90 percent are losing wealth just how long do you think that goes on when the difference is being made up by government support?

Somehow you all don't make the connection between the plight of the top 1% and the plight of the bottom 80% and the whole "wealth redistribution" issue.

Patriot,
Herriman, UT

Pragmatistferlife: We have a record 90 million people on food stamps largely because we allow it. Everytime they eat a meal you or I are paying for it. How about sending those 90 million out to work daily in some kind of service and make them earn it? How many churches,charities or parents would help the poor if we kicked the goverment out of it? I guarantee these groups would manage the welfare of the poor a lot better than government does. You seem to have a real problem with capitalism like most socialist minded folkes. Stop telling us how evil rich CEO's are, the free market always determines how much somebody deserves to be paid.

Tyler D
Meridian, ID

@Patriot – “We need conservatives to start trotting out the propaganda machine”

How about just a robust exchange of ideas and let the people decide which direction they want to go? Sounds better to me than what the Germans were doing in the 1930’s.

@pragmatistferlife – “Somehow you all don't make the connection between the plight of the top 1% and the plight of the bottom 80% and the whole "wealth redistribution" issue.”

Excellent comment!

And all we have to do is go back the Gilded Age (pre-1930’s) to see what our society will look like if we take the conservative policies to their logical conclusions.

@procuradorfiscal actually makes a great (unintended) case for why the policies started under FDR are necessary at a time when the rich are doing so amazingly well – they sure aren’t pumping all that hoarded cash into jobs though, at least not jobs in this country.

marxist
Salt Lake City, UT

I am a retired economics professor who has taught the established economics gospel all of his life as per the will of his employers. But I also have a keen appreciation of Marx's theoretical system. I continue to contend that a major problem for economics is that discipline's refusal to let Marx into the fraternity. Marx's model of surplus value and capital accumulation is essentially correct in my view. Marx's absence in the current economics scene has permanently crippled the discipline. Economics indeed needs a new vocabulary - the vocabulary and concepts of Marx.

Of course I will get the usual flack about what a flop the Soviet Union was, and what a flop Cuba is, etc. But all are beside the point. Marx was a western economist, the last of the classicists, with a uniquely important theoretical model. Because of the cold war he is absolutely taboo. This I understand. But as Freud is to psychology, Marx is to economics. Economics will continue to be laughing stock until he's allowed in.

Tyler D
Meridian, ID

@Patriot – “How many churches, charities or parents would help the poor if we kicked the goverment out of it?”

Not nearly enough to keep millions out of abject poverty, especially given today’s current church membership numbers (i.e., lower than 1930 which couldn’t keep millions of elderly out of poverty).

@marxist – “I continue to contend that a major problem for economics is that discipline's refusal to let Marx into the fraternity.”

Besides the obvious reasons you mention I think this is because Marx was less an economist (certainly in any applied rigorous sense) and more a political theorist as well as an iconoclast.

But even as an economist he held some deeply flawed axiomatic assumptions – namely, the labor theory of value and his lack of understanding of how ideas and entrepreneurial skills contribute value.

On top of that, he completely misunderstood human nature - how we respond to incentives and how our positive (creative) impulses contribute to economic output. Marx would be lost trying to explain today’s information economy.

Like Freud he was a good writer but also like Freud his ideas are largely discredited.

Semi-Strong
Louisville, KY

Marxist,

You overstate his importance. Freud was the father of psychoanalysis. Adam Smith was the father of modern economics. Whatever place Marx might or might not have, it is in clear second position to Smith.

procuradorfiscal
Tooele, UT

Re: "But as Freud is to psychology, Marx is to economics."

If by that you mean, thoroughly and irretrievably discredited, I'm with you.

I've said it before -- it never ceases to amaze that otherwise intelligent people would continue to espouse a theory that has such a long and gory history of failure.

It seems the height of liberal hubris to suggest that, even though marxist theory has resulted in death, destruction, and chaos EVERY time it's been tried, the past is somehow irrelevant and that history obliges us to try it again in America.

Do modern American liberals really believe they're that much better, brighter, more insightful, more compassionate, or more righteous than their Russian, Chinese, North Korean, Cuban, Romanian, Yugoslav, Bulgarian, East German, Burmese, Vietnamese, Bolivian, Venezuelan [etc., etc.] counterparts?

If so, how so?

CLM
Draper, UT

Here's one piece of economic vocabulary that explains what's happening, but we rarely hear anyone put the blame where it belongs: The Federal Reserve.

The federal government could never have accumulated debts of the magnitude that the US now holds without a central bank to be its "buyer of last resort." The Fed caused the Great Depression, it caused the 1970s Stagflation, and it has only become worse since Alan Greenspan's appointment during the Reagan era. The past 6 years with zero interest rates have caused massive speculation. The Fed tells the world untruths about the cost of money, the cost of risk, and how to allocate capital. Wall Street wins, Main Street loses--over and over again. Getting the Fed out of the financial markets is the only way to put free markets and genuine wealth creation back into capitalism.

marxist
Salt Lake City, UT

RE: Tyler D "Besides the obvious reasons you mention I think this is because Marx was less an economist (certainly in any applied rigorous sense) and more a political theorist as well as an iconoclast." Most people have no idea what Marx was about as an economist. "Capital" Marx's most important (but not only) work is of the highest rigor. Joan Robinson, the famous "Mrs. Robinson" of economics, also thought so BTW. I repeat, Marx is unknown in American economics and by the public in general. He needs a hearing. What's the risk?

marxist
Salt Lake City, UT

Moreover, we of the Wasatch Socialist Party intend to provide the economist Marx a thorough airing, since the economics fraternity hereabouts won't. We're willing to take our lumps in the process. This is important. Stay tuned.

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